Andy Murray faces a battle to qualify for the semi-finals of the ATP World Tour Finals in London after he was beaten in a thrilling three-setter by world No. 1 Novak Djokovic.

Murray played some scintillating tennis to snatch the opening set, but was unable to sustain his challenge as Djokovic bounced back to claim a 4-6 6-3 7-5 victory at the O2 Arena.

After winning the toss, Murray opted to receive first and it paid dividends as he stunned the top seed to take an early lead.

Enjoying the best of the early exchanges, Murray chased down a drop shot and slammed a forehand past Djokovic for an early break, before cruising to a love service game for a 2-0 lead.

That early breakthrough proved decisive as Djokovic struggled to find a way back into the set - Murray virtually impenetrable as he dropped just three points on serve to wrap up the opening stanza in style.

But with the second set firmly in the balance, the momentum swung in Djokovic's favour when Murray's decision to serve-volley on break point failed to pay off; the Serb breaking for a 4-2 lead before clinching the second set.

As the errors began to creep into Murray's game Djokovic took full advantage, and when the Scot sent a backhand long on break point, the top seed looked to be on course for victory.

But Murray refused to lie down, and after fending off break points in his next two service games, two crucial HawkEye challenges saw him roar back into contention.

His first challenge - questioning the validity of a Djokovic ace, saw him win the ensuing rally for two break points, and the second showed Djokovic to have hit his return wide as the Scot found himself back on level terms.

With the match on a knife edge, it looked like the contest would be decided on a tiebreak, but Djokovic's superb backhand return saw him break for a third time, and despite Murray's best efforts, the Serb hung on for victory.

Murray will face Jo-Wilfried Tsonga on Friday, with Group A still wide open after the Frenchman was beaten 7-5 3-6 6-1 by Tomas Berdych.

Tsonga, who reached the final last year, recovered from dropping the opening set, but was outplayed in the decider as Berdych kept his hopes of reaching the last four alive.

The Czech will face Djokovic on Friday - with all four players still in with a chance of progression.

Even victory for Berdych may not be enough for the Czech - dependent on Murray's result against Tsonga, who still has a slim chance of reaching the last four.